Tirunelveli Municipal Corporation by its Commissioner,S.N.High Road,Tirunelveli v. M.Ramakrishnan

1BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 13.10.2011CORAM:THE HONOURABLE MRS.JUSTICE ARUNA JAGADEESANSA(MD)No.111/2008Tirunelveli Municipal Corporationby its Commissioner,S.N.High Road,Tirunelveli .. Appellant/Respondent/Defendant Vs.M.Ramakrishnan .. Respondent/Appellant/PlaintiffPrayer:- This Second Appeal is filed against the Judgement andDecree dated 12.06.2007 passed in AS.No.264/2006 by the learnedPrincipal Subordinate Judge, Tirunelveli, reversing and modifyingthe Judgement and Decree dated 18.08.2006 passed in OS.No.143/2006by the Principal District Munsif Court, Tirunelveli.For Appellant :Mr.S.P.MaharajanFor Respondent :Mr.J.AshokJUDGEMENTThis Second Appeal is filed by the unsuccessful Defendant/Tirunelveli Municipal Corporation against the Judgement and Decreedated 12.06.2007 passed in AS.No.264/2006 by the learned PrincipalSubordinate Judge, Tirunelveli, reversing and modifying theJudgement and Decree dated 18.08.2006 passed in OS.No.143/2006 bythe learned District Munsif Court, Tirunelveli.2. For the sake of convenience, the parties are arrayed asthey were arrayed in the suit.3. The case of the Plaintiff/respondent herein, as set outin the plaint, is as follows:-a. The Plaintiff is the owner of the suit residentialbuildings and they are in his own use and occupation. After theconstruction completion report, in 1998, none of the Officials ofthe Defendant Corporation either inspected the buildings or tookmeasurement of the same to assess the property tax. When thePlaintiff contacted the Defendant, in connection with water tapconnection, he was directed to pay Rs.1486/- orally to eachbuilding as property tax per half year. In so far as theassessment of the new buildings is concerned, a special noticewith reasons is to be served on the assessee, as per theCorporation Act and the assessee must be served with a copy of theworking sheet to establish that the fair rent principles have beenfollowed to arrive at the tax. But, no such documents had been https://hcservices.ecourts.gov.in/hcservices/ 2served on the Plaintiff. Finally, when the Plaintiff insisted uponfor the special notice, on 15.6.1998, the Defendant served twoseparate special notices for Door Nos.11 and 11A with assessmentNos.14547 and 14528 after getting the signature of the Plaintiff.The said notices are with effect from 01.04.1998 as shown in them.The Defendant has shown the rental value as Rs.1200/- withoutfollowing the fair rent principles and shown the half yearly tax asRs.1486/- to each building. Any how, no reasons have beenmentioned in the notices. No copy of the working sheets weresupplied along with the said notices. The fair rent principleswere not followed in fixing the tax. The information regardingfiling of appeal and limitation were erroneously mentioned in thesaid notices. In short, the said notices are not in accordancewith law and hence, they are invalid under law. Under the saidcircumstances, the fixation of property tax at Rs.1486/- to eachbuilding is arbitrary, which is liable to be set aside.b. Along with the above said special notices, theDefendant gave two quin-quinnial revision notices with assessmentNos.50386 and 50387 for the period from 01.10.1998. As per thesaid notices, the property tax revised to be paid by the Plaintiffis Rs.572/- to each building. But, the Defendant Corporationserved upon the Plaintiff two additional notices for the quin-quinnial revision of the tax, directing the Plaintiff to pay theoriginal wrong assessment amount of Rs.1486 to each of thebuildings. Following the said special notices, the DefendantCorporation sent a demand notice dated 02.12.1998 to the Plaintiffclaiming property tax for 1997-1998/I and II and 1998-99/I periodto a tune of Rs.5944/-. When the Plaintiff contacted the Defendantfor clarification, the Defendant advised him to pay the above saiddemanded tax and then to file a revision petition to the Defendant.Hence, the Plaintiff paid the said tax with protest and filed arevision petition on 21.6.1999. But, till date no hearing wasgiven and no order was passed on the said revision petition. Thetax amount to the next Door NO.12, which is bigger than Door No.11and 11A, jointly is very low i.e. 1/3rd of this tax. c. No addition of building has been put up. Theemployees of the Defendant Corporation attempted to collect the newtax by force. Hence, the Plaintiff filed a suit in OS.No.178/2001before the I Additional District Munsif, Tirunelveli fordeclaration that the notices with assessment numbers seeking tocollect the tax is illegal, null and void and the said suit wasdecreed in favour of the Plaintiff on 31.12.2003 and no appeal hasbeen filed as against the same and hence, the decree made in thesaid suit has become final. Thereafter, suddenly, the DefendantCorporation issued a notice dated 31.12.2004 stating that a new taxRs.9725/- was levied for Door Nos.11 and 11A from 01.10.1998 andthat the new tax has been arrived at as per the direction given inthe earlier suit and the said notice is illegal, unjust andarbitrary and against the provisions of the Municipal CorporationAct.d. The Defendant Corporation, under the wrong impressionthat the court gave a direction to assess a new tax, has comeforward with a new notice demanding to pay a new tax, which is more https://hcservices.ecourts.gov.in/hcservices/ 3than the earlier tax. The demand notice is purported to have beenissued under Section 2(h) and Section 8 of the TirunelveliMunicipal Corporation Act and under Section 168 of the Act readwith Rules 5 to 9 of the Second Schedule appended to the rules ofthe Act. The impugned notice is not at all in accordance with anyprovisions. The Defendant Corporation sent a final notice dated06.12.2005 stating that the amount of tax from 01.10.10.1998 to2005-2006/II to the tune of Rs.1,45,875/- should be paid withinthree days, failing which water connection would be disconnected.In such circumstances, the suit has been filed to pass a Judgementand Decree, declaring that the special notice bearing No.43404dated 31.12.2004 for the suit building under assessment No.50842issued by the Defendant Corporation seeking to collect the new taxthrough the impugned notice from the Plaintiff is illegal,arbitrary and unenforceable in law and for permanent injunctionrestraining Defendant Corporation from collecting new tax for thesuit building through the said notice from the Plaintiff in anymanner and declaring the tax amount of Rs.1144 (572+572) for theschedule building as mentioned in the special notices underassessment Nos.50386 and 50387 and to collect the tax amount ofRs.1144 (572+572) for the schedule building as mentioned in thespecial notices under assessment Nos.50386 and 50387 from01.10.1998 from the Plaintiff.4. The case of the Defendant, as set out in the WrittenStatement, is as follows:-The tax was fixed on the rental value determinable underfair rent formula in accordance with the decree in OS.No.178/2001taking note of various decisions of the Honourable Supreme Courtand High Court. The Defendant contended that the assessment wasmade in compliance of the provisions of the Coimbatore CityMunicipal Corporation Act and it cannot be impeached in the civilcourt. 5. On the pleadings of both the parties, necessary issueswere framed by the Trial Court. Before the Trial Court, on the sideof the plaintiff, Exs.A1 to A8 were marked and PW.1 was examined.On the side of the defendant, DW.1 was examined.6. On consideration of the oral and documentary evidenceadduced in the case, the Trial Court, holding that there was nobasis or the basis adopted for assessing the property tax wasagainst the provisions of the Act, decreed the suit declaring thatthe impugned notice dated 31.12.2004 issued by the DefendantCorporation is illegal and unenforceable, but in so far as therelief sought for by the Plaintiff to direct the Defendant tocollect the tax amount of Rs.1144/- as mentioned in the specialnotices under assessment Nos.50386 and 50387 is concerned, theTrial Court declined to grant the said relief. However, the TrialCourt observed that the Defendant can issue fresh notice to thePlaintiff and cause inspection of the premises and after givingsuch opportunity determine the tax payable in accordance with theprovisions of the Act.7. Being aggrieved by the Judgement and Decree of theTrial Court, the Plaintiff filed an appeal in AS.No.264/2006 beforethe Principal Subordinate Judge, Tirunelveli. The lower Appellate https://hcservices.ecourts.gov.in/hcservices/ 4Court confirmed the findings of the Trial Court and further grantedthe relief of declaration directing the Defendant Corporation torecover the tax as per the assessment made in the special noticesunder assessment Nos.50386 and 50387 and thus, decreed the suit intoto. Being aggrieved by that, this second appeal has been filed.8. While admitting this second appeal, the followingsubstantial questions of law have been formulated:-1.Whether the suit as framed is maintainable?2.Whether the Judgement and Decree of the firstappellate court is erroneous on account of itsmisconstruction of documents exhibited on the sideof the Respondent?9. I have heard the learned counsel for the parties andexamined the judgement of the courts below and other materialsplaced on record including the oral and documentary evidence.10. Mr.S.P.Maharajan, the learned counsel for theAppellant submitted that the lower Appellate Court exceeded itsjurisdiction in granting the relief of declaration and mandatoryinjunction by directing the Appellant to recover the tax as perthe claim of the Plaintiff, which is contrary to law. He wouldsubmit that the assessment was made, following the provisions andthe rules prescribed under the Coimbatore City MunicipalCorporation Act, 1981 and in accordance with the decree passed inOS.No.178/2001 with regard to the assessment of tax for thebuildings owned by the Plaintiff. 11. Per contra, Mr.J.Ashok, the learned counsel for theRespondent submitted that despite specific direction by the courtin the earlier suit in OS.No.178/2001, the Defendant failed tofollow the procedures as contemplated in Sections 121, 122 and 123of the Coimbatore City Municipal Corporation Act, 1981 and thecourts below have rightly pointed out that the basis adopted forassessing the property tax is incorrect and accordingly, set asidethe assessment. 12. I have carefully considered the submissions made bythe learned counsel on either side and the relevant provisions oflaw. It has to be pointed out that the Plaintiff challenged theassessment made by the Defendant Corporation under the specialnotice dated 15.6.1998 in assessment Nos.14547 and 14528 andadditional special notice No.50386 and 50387 in OS.No.178/2001 andthe said assessments were held to be invalid and unsustainable bythe I Additional District Munsif, Tirunelveli by Judgement andDecree dated 31.12.2003. The same has not been challenged by theAppellant and it has become final. The learned I AdditionalDistrict Munsif, Tirunelveli, in the said suit, however, observedthat there was no bar for the Defendant to make assessment afterfollowing the procedure as contemplated under the Act. 13. According to the Plaintiff, the Defendant Corporationagain issued special notice determining the tax without followingthe procedures as contemplated under the Act and merely said in thespecial notice in assessment No.50842 dated 31.12.2004 that revisedtax is demanded in accordance with the decree in OS.No.178/2001 andon the basis of fair rent determined by the Corporation. https://hcservices.ecourts.gov.in/hcservices/

514. As per Section 8 of the Municipal Corporation Act forthe City of Tirunelveli (Act 28 of 1994), the provisions of theCoimbatore City Municipal Corporation Act (Act 25 of 1981),including the provisions relating to levy and collection of any taxor fee stood extended to and apply to the Corporation ofTirunelveli. It is pertinent to note that the provisions inSections 121 to 132 of Act 25 of 1981 have been substituted bySection 9 of the Tamil Nadu Act 45 of 1997 and new procedure hasbeen prescribed relating to levy of property tax in Section 121.It reads as follows:-"121. Levy of Property Tax:- (1) The property tax shallbe levied on all buildings and lands within the city.(2) (a) In relation to any building newly constructed orwhere any addition or alteration has been made to anyexisting building the owner or occupier of suchbuilding.(b) where the title of any building or land istransferred, such transferee.(c) in relation to any building or land, in the event ofdeath of the person primarily liable to the payment ofproperty tax, the person on whom the property istransferred, shall furnish to the Commissioner withinsuch dates as may be prescribed, a return for suchbuilding or land containing such details as may beprescribed for the assessment or reassessment of theproperty tax to the said building or land.(3) In the case of reassessment or general revision ofany property tax leviable under this Act, the owner oroccupier of any building or land shall furnish to theCommissioner within such time as may be prescribed, areturn in such form containing such details as may beprescribed for the assessment of property tax to suchbuilding or land.(4) If any owner or occupier of any building or landfails to furnish a return as required under sub section(2) of sub section (3) or furnishes an incomplete orincorrect return, the Commissioner or any personauthorised by him in this behalf, shall cause aninspection to be made and also to make such localenquiries as may be considered necessary and based onsuch inspection and information collected, shall preparea return and a copy of the return shall be furnished tothe owner or occupier of the building or land.(5) On receipt of a return under sub section (2) or subsection (3) or on the basis of the return prepared bythe Commissioner under sub section (4) and afterconsidering the objections, if any, received, the https://hcservices.ecourts.gov.in/hcservices/ 6Commissioner shall determine the tax payable inaccordance with the provisions of this Act and shallsend an intimation to that effect to the personconcerned.(5A) In the case of failure to furnish a return undersub section (2) or sub section (3), the Commissioner, inaddition to the tax determined under sub section (5)direct the owner or occupier of any building or land topay by way of penalty, a sum of rupees two hundred andfifty or five per cent of the tax determined under subsection (5) whichever is higher.(6) For the purpose of assessment of property tax forany building or land in the City, the Commissioner orany officer authorised by him in this behalf may enter,inspect survey and measure any building or land, aftergiving due notice to the owner or occupier before suchinspection and the owner or occupier shall be bound tofurnish necessary information required for this purpose.(7) The property tax on building and land shall,subject to the prior payment of the land revenue, if anydue to the Government thereon, be a first charge uponthe said building or land and upon the movable propertyif any found within or upon such building or land andbelonging to the person liable to pay tax."15. Sub section (2) says that in relation to any buildingnewly constructed or where any addition or alteration has been madeto any existing building, the owner or occupier of such buildingshall furnish to the Commissioner within such time as may beprescribed, a return in such form containing such details as may beprescribed for the assessment or reassessment of the property taxto the building. 16. As per sub section (4), in case the owner fails tofurnish a return as required under sub section (2) theCommissioner or any person authorised by him in this behalf, shallcause an inspection to be made and also to make such localenquiries as may be considered necessary and based on suchinspection and information collected, shall prepare a return and acopy of the return shall be furnished to the owner of the building.17. Sub section (6) authorised the Commissioner or anyOfficer authorised by him in that behalf to enter, inspect, surveyand measure any building or land, after giving due notice to theowner before such inspection and the owner is bound to furnishnecessary information required for this purpose.18. Section 122 deals with minimum and maximum basicproperty tax, additional basic property tax etc. to be levied andSection 123 deals about the determination of basic property tax oradditional basic property tax etc. by council for assessment andcalculation of property tax. Section 124 prescribes the mode ofcalculation. https://hcservices.ecourts.gov.in/hcservices/

719. It is fundamental that once a procedure is prescribedunder the Rules relating to assessment of property tax, the samehas to be followed. In the present case, it is apparent that nosuch procedure has been followed in making assessment of propertytax. The Plaintiff assertively stated that no inspection was madeby the Officials of the Corporation before determination ofproperty tax and also denied the fact of issuance of notice to thePlaintiff before such inspection. The learned counsel for thePlaintiff would submit that the Defendant Corporation issued thespecial notice Ex.A7 demanding revised tax without following theprocedures as contemplated under the Act.20. At this juncture, it is useful to refer to theevidence of DW.1, the Assistant Revenue Officer in the DefendantCorporation who has admitted that no document or material wasplaced before the court to show that any inspection was made by theauthority before determining the tax payable by the Plaintiff. Therelevant portion in his evidence is extracted below:-@epaha thlif eph;zak; bra;a[k; Kd;g[ thjpf;F mwptpg;g[ bfhLf;fg;gl;ljhvd;W bjhpahJ/ thjpapd; tPl;il brd;W ghh;itapl;ljw;F Mtzk;Bfhh;l;oy; jhf;fy; bra;atpy;iy/ epaha thlif eph;zak; bra;tjw;F xUfzf;F gotk; cs;sJ/ epahathlif kjpg;gPL mwpf;if Bfhg;gpy; cs;sJ/mij jhf;fy; bra;ayhk; kjpg;gPL mwpf;ifgo fl;olj;jpd; g[y vz; vd;dvd;W Bfhg;ig ghh;f;f Btz;Lk;. vt;tst[ fhypkid nUf;fpwJ vd;gija[k;.vt;tst[ nlj;jpy; fl;Lkhdk; cs;sJ vd;gija[k; Bfhg;gpid Ma;tbra;Jjhd; brhy;y Koa[k;/ vdf;F Kd;g[ ,Ue;j Ma;thsh; fl;olj;ijBgha; mse;jpUg;ghh;. ve;j Bjjp vd;W Bfhg;ig ghh;j;Jjhd; brhy;yKoa[k;.21. Admittedly, no such document or file was produced,though it was admitted by DW.1 that the same was available with theOffice. Therefore, it is evident that the Defendant has notfollowed the procedures and rules as contemplated under the Actbefore making assessment and determination of property tax to thebuilding owned by the Plaintiff. The courts below were right inholding that the impugned notice dated 31.12.2004 issued by theDefendant Corporation is unsustainable. However, it has to bepointed out that the lower Appellate Court erred in determining thetax amount of Rs.1144/- for the schedule building vide assessmentNo.50386 and 50387 and consequently directing the DefendantCorporation to collect the said amount from the Plaintiff. In sofar as the said finding is concerned, the lower Appellate Court hascommitted an error, thus calling for interference by this court.22. In the result, this second appeal is allowed. TheJudgement and Decree of the lower Appellate Court is set aside andJudgement and Decree of the Trial Court is restored. The DefendantCorporation shall pass assessment orders afresh for the period inquestion after giving an opportunity of hearing to the Plaintiffas per the provisions of the Act and in the light of theobservations made above. However, in the circumstances of thecase, there will be no order as to costs.Sd/-Assistant Registrar/True Copy/ Sub Assistant Registrar https://hcservices.ecourts.gov.in/hcservices/ 8To:1.The Principal Subordinate Judge, Tirunelveli2.The District Munsif, Tirunelveli3.The Record Keeper, VR Section, Madurai Bench of Madras High Court, Madurai srcmssk/07.12.2011 /4c -8p/- Judgement inSA(MD)No.111/200813.10.2011